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Wednesday, September 09, 2015

How we can save the nation's farmers

India got a
reality check on Saturday when newspapers splashed the shocking
conclusions of the first Socio-Economic and Caste Census (SECC) since
1934, which revealed the extent of rural deprivation.

Its
primary finding was that rural households make up nearly three quarters
of the country’s population, some 884 million people, and that an
overwhelming 74 per cent of them survive on a monthly income of Rs 5,000
for their highest earner.

The
message from these staggering numbers is obvious: India has to resolve
some very basic issues within before it can aspire to be any kind of
power, regional or global.

With
agriculture contributing just 13.7 per cent to the Indian Gross Domestic
Product, it is clear that the rural situation is a millstone around the
country’s neck, rather than being an asset in the transformation of our
economy.

But
this millstone happens to comprise of people - hundreds and millions of
men, women and children who are illiterate, poor and hungry.

Rural Assets

More
than half of these households do not own any land, the primary rural
asset. And neither are they able to create other assets because they
lack education. Thirty-six per cent of them are illiterate and the rest
of those considered literate barely qualify since they have not even
completed high school.

In
practical terms a vast number of households have to struggle hard to
get food, potable water, have no power or toilets. The consequences of
this are illiteracy, malnutrition, and vulnerability to disease.

As
another report being suppressed by the government and revealed by The
Economist notes, fully 30 per cent of the country's children suffer from
malnutrition and its terrible consequences of “stunting” and “wasting” -
being abnormally short or underweight. You can be sure most of these
folk are from the rural areas too.

Over
the years, a large number of people have worked their way out of
poverty, gained literacy, acquired the trappings of middle class living
like refrigerators, washing machines, and a two or four-wheeled vehicle.
But the SECC has just opened our eyes to the sheer scale of poverty
that continues to blight our land.

Because
this deprivation is rural, many of those who make policy, read
newspapers, and shape the discourse of the country through the TV, never
really get to grasp what it means.

Hidden
away in the backwaters of Bihar, Jharkhand, Chhattisgarh or Orissa,
even the minor illness of an earning member of the household can mean
slow starvation and death.

Sadly,
richer states are not too different - 47.6 per cent of rural Rajasthan
remains illiterate and the much-touted Gujarat’s child malnutrition
rates of 33.3 per cent are higher than the national average.

At
a macro level it is obvious that the country needs a manufacturing
revolution, as Prime Minister Modi says, to shift these millions into
productive occupations. But the issue is not simply one of investments,
ease of doing business, FDI and the other buzzwords you hear, but of a
process that would first eliminate hunger and disease and provide
education to the rural masses.

The
figures say, for example, that only 5.4 per cent of the people in rural
India have completed high school, and only 3.4 per cent have graduated
from college.

Red Herrings

With
these numbers, who or what will populate your factories? “Make in
India” or MNREGA are red herrings. What the country needs to urgently
work on is an sweeping agrarian revolution.

For
too long policy - essentially subsidising fertiliser and providing
unsustainable support prices - has drifted. In the meantime, the size of
holdings has declined, even as the number of persons dependent on those
holdings has increased. The water table has dropped precipitously.

Biggest Problem

But
the biggest problem has been the fractured Indian agricultural market,
dominated as it is by Agriculture Produce Marketing Committees. The
result is that there are situations where brinjal is selling for Rs 300 a
quintal in Punjab and Rs 3,000 a quintal in Gujarat at the same time.

Middle-men
distort the prices and availability of commodities. India does not have
the option of forcing the process, as was done in the Soviet Union and
China, and as the experience of countries like the US and Japan shows,
it is not easy to reform the agricultural sector in democratic countries
as well because of its political clout.

But
for India there is, perhaps, little choice. Politicians have been
kicking the can down the road for the past decades. Now, they have
accumulated to form the millstone that will block the progress of the
country.

Bold
steps are needed to create a new agricultural paradigm, or else the
country is condemned to walk on the development treadmill forever.